Tempur Sealy International, Inc. (TPX) swung to a net profit for the quarter ended Dec. 31, 2016. The company has made a net profit of $63.40 million, or $ 1.12 a share in the quarter, against a net loss of $11.30 million, or $0.18 a share in the last year period. On the other hand, adjusted net income for the quarter stood at $66.50 million, or $1.18 a share compared with $62.70 million or $0.99 a share, a year ago.
Revenue during the quarter went up marginally by 0.29 percent to $769.50 million from $767.30 million in the previous year period. Gross margin for the quarter expanded 70 basis points over the previous year period to 41.51 percent. Total expenses were 86.03 percent of quarterly revenues, down from 88.04 percent for the same period last year. This has led to an improvement of 201 basis points in operating margin to 13.97 percent.
Operating income for the quarter was $107.50 million, compared with $91.80 million in the previous year period.
However, the adjusted operating income for the quarter stood at $112 million compared to $111.20 million in the prior year period. At the same time, adjusted operating margin improved 6 basis points in the quarter to 14.55 percent from 14.49 percent in the last year period.
Tempur Sealy International, Inc. Chairman and CEO Scott Thompson commented, "Overall the worldwide markets for our products are solid and the Team remains focused on our long-term initiatives. Our fourth quarter adjusted EPS growth of 19% is evidence of the strength of Company's Brands, and business model, even against a relatively muted bedding industry."
Operating cash flow drops significantly
Tempur Sealy International, Inc. has generated cash of $165.50 million from operating activities during the year, down 29.33 percent or $68.70 million, when compared with the last year.
The company has spent $62.40 million cash to meet investing activities during the year as against cash outgo of $59.70 million in the last year.
The company has spent $185.10 million cash to carry out financing activities during the year as against cash outgo of $90.70 million in the last year period.
Cash and cash equivalents stood at $65.70 million as on Dec. 31, 2016, down 57.31 percent or $88.20 million from $153.90 million on Dec. 31, 2015.
Working capital increases sharply
Tempur Sealy International, Inc. has recorded an increase in the working capital over the last year. It stood at $126 million as at Dec. 31, 2016, up 31.11 percent or $29.90 million from $96.10 million on Dec. 31, 2015. Current ratio was at 1.23 as on Dec. 31, 2016, up from 1.13 on Dec. 31, 2015.
Debt increases substantially
Tempur Sealy International, Inc. has witnessed an increase in total debt over the last one year. It stood at $1,888.10 million as on Dec. 31, 2016, up 29.78 percent or $433.30 million from $1,454.80 million on Dec. 31, 2015. Total debt was 69.86 percent of total assets as on Dec. 31, 2016, compared with 54.78 percent on Dec. 31, 2015. Interest coverage ratio deteriorated to 5.32 for the quarter from 4.17 for the same period last year.
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